05 February 2012 7:49 PM

A remedy for the debased

You don’t have to hold a brief for Fred Goodwin to be concerned by the way his knighthood was removed, a process appropriately called ‘debasement’. Many point out he has not committed a criminal offence or been struck off by a professional authority which are the main reasons for the Honours Forfeiture Committee to take action. They also say that the overriding issue is whether there is compelling evidence that the individual has brought the system into disrepute and this was the reason given by the Cabinet Office when they announced the decision. Apparently after over three years it has only just dawned on the civil servants who comprise the committee that Mr. Goodwin was the ‘dominant decision maker’ at RBS and that that Bank’s failure played an important role in the financial crisis of 2008-9. What stone do they live under? The investigations into the collapse did not single Mr. Goodwin out for personal criticism and whilst he clearly made massive errors of judgment in handling the bank’s affairs his real sin in the eyes of many was attempting to keep hold of his contractual benefits, something that is done every day by dismissed executives. He just had more to hold on to than everyone else.

So on the reasonable assumption that something is rotten in the process what could Mr. Goodwin do about it if so inclined? The obvious thought is to attack the decision by the process of judicial review. This is the means by which the courts control illegal, arbitrary and irrational decisions of administrators. One judge has said that the kind of decision capable of judicial review is a decision that deprives an individual of a benefit he had been permitted to enjoy and which he legitimately expects to be allowed to continue to enjoy until he has been given a rational ground for withdrawing it as well as an opportunity to object. That seems to fit Mr Goodwin’s case although it is reported that he was asked if he had anything to say and did not do so. This leaves the question whether the grounds for withdrawing the knighthood were rational. There could be many arguments here based on the time it all took, comparison with others who forfeited honours and possible political pressures that may come to light in litigation. The test is a stiff one, as irrationality here requires a decision that defies logic or moral standards so much that it can be said that no sensible person could have reached that conclusion.

In addition there is another technical problem, which gets in the way even if, as many think, the decision was irrational. This is because the granting of honours is regarded as being part of what is known as the prerogative. These are powers like making treaties, dissolving Parliament and the appointment of ministers, which are not based on written laws but originate in discretionary powers that originally belonged to the Crown but are now administered by ministers. Many of these powers are regarded as being incapable of control by judges involving, as they do, a range of policy considerations and executive discretions, incapable of resolution by evidence in court. The conventional view is undoubtedly that the granting of honours is within this category. It therefore seems that the case for judicial review succeeding is best described as difficult.

Although it is true that the trend in the law has been to cut back on such no-go areas no government has ever shown any inclination to change this view of granting honours. Cynics will say that the power of patronage is too valuable to abandon and conservatives that the system works well enough and therefore any change is likely to make things worse.

However this affair leaves a nasty taste. Peers of the realm commit criminal acts for which they go to prison and keep their titles. The strict argument that granting a peerage is not an honour may be constitutionally accurate but it makes no sense to any rational citizen today. There are other knights who have made serious business blunders and worse and not suffered forfeiture. Put at its simplest the system seems to operate in an arbitrary and unfair manner. This is particularly so as a very public humiliation is involved in removing an honour. There will be cases when this humiliation is deserved but it should only be doled out on the basis of clear rules capable of adjudication and not left to the uncontrolled discretion of civil servants and ministers susceptible to the will of the mob. Fred Goodwin may be an odd champion for reform but his case highlights the need forA change.

Share this article:

Comments

You can follow this conversation by subscribing to the comment feed for this post.

A very interesting approach although it seems to be accepted by Mr Levinson that judicial review is a non starter.
However, at its heart isn't the award of a knighthood really a reflection of the public perception of what an individual has done - it reflects public opinion and that is its value. Therefore if, unfortunately, an individual later seriously blots his copy book in the overwhelming view of the public, isn't reasonable to take away the honour?
Lindsay Burn

Post a comment

Comments are moderated, and will not appear on this weblog until the moderator has approved them. They must not exceed 500 words. Web links cannot be accepted, and may mean your whole comment is not published.

Stephen Levinson

Stephen Levinson is an experienced employment lawyer. A large part of his work is acting for senior executives leaving their jobs or taking up new employment and helping to resolve conflicts that then arise. He does the same job for employers but not at the same time.

Stephen writes and broadcasts on legal and employment law issues and is a member of the Editorial Boards of Employment Law Briefing; Industrial Law Journal and the Employment Law Journal. he is a Vice President of the Industrial Law Society.